Apple responds to claim from old Beats partner: 'Regret is insufficient'

In a new profile by Bloomberg, Monster CEO
Noel Lee tells the tale of how he was allegedly betrayed by Dr.
Dre and Jimmy Iovine and cut out of Beats’ $3.2 billion sale to
Apple.

In the early days of Beats, Monster was the manufacturing
partner who manufactured, marketed, and distributed Beats
headphones, paying Dre and Iovine a 19% fee for using both the
Beats name and their celebrity cachet. But Lee says that wasn't
all Monster brought to the table.

Lee claims he came up with the whole idea. “[Dre and
Iovine] were talking about building a better speaker, and I said,
‘Headphones are the new speakers. Let’s make headphones
together.’ And that’s where Beats came from,” Leetold Bloomberg.

I was
walking down the beach one day and I ran into Andre Young, Dr.
Dre.

I was
exercising, and I said, 'How’re you doing?' And Dre is very
soft-spoken, doesn’t talk much, he just said to me, 'Yo, my
lawyer, he wants me to sell sneakers — what do you
think?'

I said, 'Dre, nobody in the world cares about how you dress or
will care about your sneakers. What you should sell
is speakers.' At that moment, he said to me, 'We
can do that?' And I said, 'F--- yeah.'

He said, 'You know I use this word ‘beats, you know, I make
beats, right, so 'Beats by Dr. Dre.'

I said, 'OK, headphones ... beats ... by Dr. Dre —
headphones and speakers.' He said, 'I’m in,' and that
was the beginning of the company, and that’s exactly how it
happened.

Lee iscurrently suingDre, Iovine, and the phone
company HTC, accusing them of masterminding a sham acquisition of
Beats by HTC to trigger a specific clause in Monster’s contract.
That clause allowed Beats to end its manufacturing agreement with
Monster if there was a change in ownership of the company.

“We didn’t think that much about it,” Leesaid to Bloomberg. “We saw ourselves as in
business with Dre and Jimmy for the long term.” What he didn’t
count on was Dre and Iovine selling the company to HTC and then
buying it back. And Lee claims it was all to lay groundwork for
the Apple acquisition.

Monster's Noel and Kevin
LeeGetty / Tim
Whitby

If Apple believes there is any kernel of truth to Lee’s
version of the history of Beats, it’s doing a good job hiding it.
Though Apple is not named as a defendant in the lawsuit, its
lawyers are defending Dre and Iovine. And they are coming out
swinging.

“Lee apparently regrets his business decisions and now asks
that he and Monster be excused from as many of their contractual
obligations as possible, but regret is insufficient,” Apple’s
lawyers assert,according to Bloomberg.

It's
not hard to see that Apple clearly believes it owes Noel Lee
nothing.